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"TRI-VALLEY BANK ANNOUNCES SIGNING OF DEFINITIVE AGREEMENT WITH LOCAL INVESTORS"
Press Release, March 15, 2010
SAN RAMON, Calif.--(BUSINESS WIRE)--Tri-Valley Bank (OTCBB:TRVB), announced today the signing of a definitive agreement with Tri-Capital, LLC (TC), which will invest $6,000,000 in the Bank by purchasing 15,851,385 shares of the Bank’s common stock, which is $0.37852 per share. The definitive agreement gives TC the right to purchase an additional 13,209,488 shares at the same price share for up to a year following the closing. In addition, the definitive agreement contemplates the Bank will conduct an offering of up to 1,981,423 shares of common stock to its existing shareholders at the same price of $0.37852 per share. There are 1,761,265 shares of the Bank’s common stock currently outstanding.
TC is a company formed by Robert Hirt, owner of Walnut Creek based RPM Mortgage and a long time area resident. The transaction is expected to close no later than August 31, 2010 and is subject to regulatory approval.
The additional $6.0 million in capital will raise the Bank’s Tier 1 Capital Ratio to 15.4%, well above regulatory minimums, based on the Bank’s capital levels at December 31, 2009. It will also allow the Bank to resume its growth, which has been restrained due to capital deterioration. According to David P. Greiner, President and CEO, “The Bank has been hampered by inadequate capital which had capped the Bank’s size at a scale below the level which would allow it to achieve profitable operations. With the recapitalization, the Bank will have the financial resources to reach scale and generate the necessary level of earning assets to achieve profitability. Without a doubt this is a positive step forward for this institution”. “Mr. Hirt brings the experience of building one of the most successful mortgage banking operations in the country in RPM Mortgage. He is well versed in the needs of the community having lived here for over 24 years. He will be a tremendous asset to our customers, shareholders and employees,” Greiner further stated. Hirt stated, “As a business owner and resident living in Contra Costa County I firmly believe that community banks need to be supported by local residents. In speaking with other business owners who want to see more lending by our banks to small business owners, I felt compelled to act and show my support for our community, which has been so supportive in helping me grow RPM Mortgage. I look forward to working with Dave and the Tri-Valley Board toward their goal of creating a community bank that believes in and supports self employed borrowers and small businesses.” The Bank today also announced a loss for the 4th quarter of $1,253,208 and for the year of $3,553,000. The 2009 loss was primarily attributed to credit quality issues, as the Bank lowered its operating loss before provisions to $487,469 from $995,614 the previous year. Assets declined for the year, to $87,236,760 from the previous year-end of $93,777,502. The decline allowed the Bank to maintain a Tier 1 Capital Ratio at 8.87%. Net loans declined to $69,745,413 from $81,263,417 while deposits increased to $77,072,772 from $69,387,190, year over year. The level of non-performing loans decreased for the quarter for the first time in over 6 months. The reserve for loan losses now stands at 2.88% or $2,060,000, up 12% from the previous year.
Visit Tri-Valley Bank’s website at: www.trivalleybank.com.